PEPE's Plunge: Bear Market Descent or Meme Season 2.0 Rebound?

PEPE's Price Plunge Sparks Debate Over Bounce or Further Decline

The meme coin PEPE has plunged to multi-month lows, triggering a contentious debate among analysts and traders about whether the token is nearing a bottom or faces further deterioration. After breaking critical support levels and recording a 70% drop from its peak, PEPE now trades near $0.00000485, with technical indicators and on-chain data painting a mixed picture of potential recovery and deepening bearish momentum.

Analyst Crypto Patel highlights that PEPE's breakdown below the $0.0000059 support level has flipped the higher-time-frame trend to bearish, with the level now acting as resistance. The token's price remains below all major exponential moving averages, and the MACD lines remain negative, signaling weak momentum. A weekly fair value gap (FVG) remains partially unfilled, with liquidity sweeping below multi-month lows, suggesting further downside risk toward $0.00000178-a level Patel describes as a potential accumulation zone for long-term buyers.

On-chain data exacerbates concerns. Futures open interest has plummeted to $193.5 million from over $1 billion in mid-2023, reflecting reduced leverage and a cooling market. Spot exchange netflows remain negative, indicating more tokens are leaving exchanges than entering, a sign of waning demand. Meanwhile, PEPE's recent 20% weekly crash has outpaced declines in other major meme coins, with the token down 75% year-to-date.

Despite the bearish structure, some analysts argue PEPE could stage a short-term rebound. A 12%-15% bounce to key resistance levels at $0.00000524 and $0.0000066 is deemed plausible, driven by a bullish stochastic RSI crossover and a potential short-squeeze as liquidation zones cluster near $0.000005-$0.0000055. CoinGlass data shows $950 million in 24-hour futures volume and $170–$176 million in open interest, suggesting renewed trader activity.

Community sentiment also hints at optimism. While PEPE has fallen 18% recently, proponents argue the token is in a "calm before Meme Season 2.0", with Dogecoin, Shiba Inu, and other meme coins potentially benefiting from a broader resurgence. The token's 5.7 million holders-including exchange wallets-position it among the most widely distributed memecoins, offering a broad base for future rallies.

The market faces a paradox: PEPE's sharp sell-off has coincided with nearly $1 billion in combined futures and spot inflows, indicating simultaneous bearish pressure and speculative interest. This duality mirrors past patterns, where a 4,650% rally followed a similar breakdown and consolidation phase. However, the token's liquidity remains weak, with most trading concentrated in perpetual futures rather than decentralized exchanges.

The path forward hinges on PEPE's ability to reclaim the $0.0000059 level, which would signal a structural shift from bearish to bullish momentum. Until then, the token remains vulnerable to further declines, with a 60–70% drop to $0.00000178 still on the table. For now, traders are closely monitoring the Federal Reserve's rate-cut timeline and broader market sentiment, as uncertainty over monetary policy continues to weigh on risk assets.